Is what's written on the "memo" line of a check important?

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For a check that has wrong information listed in the memo area, is it important?

Does what's written in the memo area have any legal significance?

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dhobi (Apr. 18, 2007 @ 11:33a) |

It's too late now, but couldn't the OP simply have crossed out whatever was on the memo line before depositing the check... (more)

mikeres (Apr. 18, 2007 @ 5:10p) |

A while back I was tasked with closing out all the accounts and business of a company whose assets had been sold.<br><br... (more)

aeiouy (Apr. 19, 2007 @ 12:26a) |

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That's one of FW's trashiest blobs. Looking for a real answer.

I have a partial settlement check to cash with wrong information on the memo line.


I've written 'if you cash this check, you agree to pay me US$1 million within 90 days and a $5000 per day penalty if you fail to do so' on the memo line of every check I've written since 1997, but nobody has paid me yet. I have been meaning to sue all these deadbeats, so I'll let you know when I get around to it.

No.

Someone sent the Washington Redskins (or some pro team) a check and put it was for the sale of the team.

The check was cashed, but nothing ever came of it.

Very rarely will a set of eyes even see the check, so I would not worry about it.

BTW, Tylenol is a drug.

look out for phrases like: payment in full

IANAL but from what I have heard from a law professor is that the memo line can have legal significance.

theman2 said: look out for phrases like: payment in full

IANAL but from what I have heard from a law professor is that the memo line can have legal significance.
If the expense has some "tax significance", e.g. proving that the check written was not a gift for example but a repayment for a loan etc. I would take the opportunity to note that on the memo line. Since it is a contemporaneous note, it would bolster your case.

I know if you have a dispute with someone over services or goods. And you write them a check for less than you owe and put in the memo "Paid In Full" and the person who you gave that checks cashes it and then sue you in court. The court will accept that check memo line as an agreed contract to seattle a claim for less and will rule in your favor. So Memo line can have some real value.

dolmar said: I know if you have a dispute with someone over services or goods. And you write them a check for less than you owe and put in the memo "Paid In Full" and the person who you gave that checks cashes it and then sue you in court. The court will accept that check memo line as an agreed contract to seattle a claim for less and will rule in your favor. So Memo line can have some real value.
Not completely true

tlaxson said: dolmar said: I know if you have a dispute with someone over services or goods. And you write them a check for less than you owe and put in the memo "Paid In Full" and the person who you gave that checks cashes it and then sue you in court. The court will accept that check memo line as an agreed contract to seattle a claim for less and will rule in your favor. So Memo line can have some real value.
Not completely true


I not am talking about against a loan from a bank or credit card were there is no meeting of the minds which needs to accure for a contract to be valid. If you call your bank and say "hey I am mailing you a check for less than the loan amount if you cash my loan is paid off". The bank will tell you were to go.

Hire a painter to paint your house. After he is done painting your house you deiced he did a lousy job and refuse to pay him. You write him a letter explaining why you are refusing to pay him. After a while of going back and forth you both agree to seattle the claim for 50 cents on the dollar. You write him a check with "Paid In Full" in the memo line and goto court. The court more than likely will rule in your favor.

If you write a check to your mortgage holder with the words "Paid in Full" on your frist payment no way the court will believe there was a meeting of the minds. But because you refusing to pay the painter over the quality of his job etc the court will rule based on the memo line that there was a meeting of the minds. Judge will ask him why he sueing etc and say you can agree to seatle a claim for less just to get some money today and then go sue for the balance.

If I ever have to write checks out to friends, I just put 'sexual favors' in the memo line. Spices things up a bit, especially when I'm using my first box of checks that has pictures of puppies or cartoons.

Nummerkins said: If I ever have to write checks out to friends, I just put 'sexual favors' in the memo line.

My college roommate used to put that on the rent check he wrote to me every month. The bank teller got quite a kick out of it one time, and gave me an interesting look. <img src="i/expressions/face-icon-small-shocked.gif" border=0>

Nummerkins said: If I ever have to write checks out to friends, I just put 'sexual favors' in the memo line. Spices things up a bit, especially when I'm using my first box of checks that has pictures of puppies or cartoons.

I actually had a check get returned because of this (yes, I had plenty of money in the account to cover it), so I don't do it anymore.

I bet most tellers just ignore it, but this one looked and actually didn't cash the check because it said something very similar to what you wrote. They probably got worried about the fact that paying for sexual favors is technically illegal in most places.

Just a warning, YMMV. I wouldn't put it on anything important.

As for the "paid in full," it's a bit complicated, but in some cases it WILL serve to discharge the entire debt (namely, where there is some dispute over the services and some reason for the parties to agree on a lowered price, as the case of the painter doing a bad job given above). For this reason, many places will not cash checks with that written on them. Keep in mind that it will mean nothing if you have no reason to actually dispute the payment, and a creditor can accept partial payment from you marked "paid in full" and still sue for the rest - they are allowed to take what they can get and are NOT bound by your writing. Like I said, it must be accompanied by some reasonable dispute over the amount owed or the quality of the work performed, etc.

The legal term you're looking for is "accord and satisfaction," regarding a disputed contract. Good memo on this subject at link below. Outside of this context, I doubt if a judge would give much/any weight to a notation on the memo line.

http://www.weissandassoc.com/article_accordandsatisfaction.html



Found this googling...

accord and satisfaction
n. an agreement to accept less than is legally due in order to wrap up the matter. Once the accord and satisfaction is made and the amount paid (even though it is less than owed) the debt is wiped out since the new agreement (accord) and payment (the satisfaction) replaces the original obligation. It is often used by creditors as "a bird in the hand is worth two in the bush" practicality.

and:

Before a check can create a doctrine of accord and satisfaction, the party who presents the check must make clearóby appropriate and conspicuous wordingóthat cashing the check will be construed as settlement of all outstanding claims between the parties. Notice can be in the form of words on the memo line of a check or in a cover letter enclosing the partial payment. You must understand that endorsing such a check constitutes a complete settlement of a claim though, according to UCC, a party may avoid an accord and satisfaction by returning the money within 90 days.



--------------------------


Does a simple entry in the memo line of a check create that?

Does accord and satisfaction need a restrictive endorsement on the check?

Hard to believe if I write "paid in full" on the memo line that I can wipe out the mortgage.


The check reads "deposit refund less expensis". I am seeking a full return of the deposit from a contractor that we fired before construction began. He lied and misrepresented his licensing, qualifications, and much more. Can't trust this guy, is that a trap?




evbe said: The check reads "deposit refund less expensis". I am seeking a full return of the deposit from a contractor that we fired before construction began. He lied and misrepresented his licensing, qualifications, and much more. Can't trust this guy, is that a trap?So he thinks this check takes care of things and you don't? I sure as heck wouldn't let something like this jeopardize a settlement. Tell him the check for a partial settlement won't cover it and he needs to bring you a check for the full amount. Then again, if you think that you don't stand much of a chance of getting more from him anyway, take the money and cut your losses.

I'm likely headed for arbitration to resolve this. I don't know if his sending a check is a way to minimize his potential liability under MA 93A or a way to underhandedly close the matter. I know it's not out of the goodness of his heart.

This is a good program to know about:
Massachusetts Home IMprovement Contractor Arbitration

He won't redo the check, and it's too much to just walk away from.

Nummerkins said: If I ever have to write checks out to friends, I just put 'sexual favors' in the memo line. Spices things up a bit, especially when I'm using my first box of checks that has pictures of puppies or cartoons.

I usually do things like this, but try to keep them legal ie: "For masturbating on a sea turtle". I think that's still legal. No one I have ever known has actually masturbated on a sea turtle, but they all cash the check. Liars.

I think that this is one of those cases where each state might have its own spin on the law. Never having lived in MA, I will cheerfully offer my opinion, which is worth exactly what you're paying for it:

I would happily cash the check and sue in small claims court for whatever the amount of the "expenses" that were deducted from the original deposit amount. The fact that he attempted to commit fraud (I would hope that you can document his misrepresentation of his licensure, etc.) puts him at an immediate disadvantage in court; The fact that he claims that you owe him some "expenses" based upon his inability to bilk you out of more money because you wised up and checked his bona fides would, to my mind, present an open-and-shut small claims case. Of course, once you win in small claims court, good luck collecting, but that's another thread for FWF.

Best of luck.

A little off topic but if it helps anyone who's reading this, Massachusetts is very pro-consumer. There's a state backed fund here:
Linked
that all but guarantees payment up to $10,000 for unpaid licensed home improvement contractor claims.

I have documentation from the City and State regarding engineering licensing misrepresentation. His builders and company permits are valid, although he demonstrated an inability to understand a basic building code table. This guy has been in business since the 60's and should have his head between his legs, but he keeps on going. I feel a victim of a scam.

I'm confident of a win after going through arbitration. I just don't know what this guys game is, or if I'm giving up anything by accepting his check as written.


So I make a check on my car loan with the words paid in full on the memo line and be off the hook?




evbe said: Hard to believe if I write "paid in full" on the memo line that I can wipe out the mortgage.

plane said: So I make a check on my car loan with the words paid in full on the memo line and be off the hook?

Do you guys read the thread before posting? The quick summary:

No.

First, a bank will probably NOT accept a check with that written on the memo line. Then your payment will be late.

Second, you can NOT wipe out a debt OVER WHICH THERE IS NO DISPUTE. There must be a good faith dispute over the amount of the payment, the quality of the services rendered, etc. There is no dispute that you owe $X on your home or car loan.

Most of the T&C's I've read state that they will accept the check, and that they aren't bound by nonsense you might write on the check

evbe said: I'm likely headed for arbitration to resolve this. I don't know if his sending a check is a way to minimize his potential liability under MA 93A or a way to underhandedly close the matter. I know it's not out of the goodness of his heart.

This is a good program to know about:
Massachusetts Home IMprovement Contractor Arbitration

He won't redo the check, and it's too much to just walk away from.


Since I know quite a bit about MA Home Improvement Contracts, I will chime in. I don't have a clue about te whole memo line thing, and to tell you the truth it probably doesn't matter in your case.
1. Is your contract a standard legal MA contract containing ALL the pages? A link to a very useful sample contract. Note all the requirements and make sure the hic fulfilled each one. A lot of contractors do not have the up to date contracts required by law?
2. Is an engineering license required for the job? A lot of contractors were grandfathered in when MA started requiring CSL's way back when.
3. You are correct, MA is very pro-consumer when it comes to home improvements. If he is claiming to be licensed in something he is not, if his qualifications for the license are questionable, or if he is not fully insured, report him. Do it for the sake of other home owners and for the above board contractors who suffer because of the people who jack license numbers, don't pay workman's comp, or have to charge more (and don't get as many jobs) because of all the overhead expenses for building in MA.


I just write "for illegal drugs" <img src="i/expressions/face-icon-small-smile.gif" border=0>


One year I wrote some immature and disparaging remarks in the memo field of a check to the California Franchise Tax Board regarding the marriage status of their parents at the time of their births. The next year my tax return was audited by the state. Coincidence?

I am in Massachusetts too and know a little about the Fund, but the major problem about it is that most bad "contractors" are really not contractors with the state or the company had the unsuspecting homeowner pull the permit (thus voiding this avenue).


evbe said: A little off topic but if it helps anyone who's reading this, Massachusetts is very pro-consumer. There's a state backed fund here:
Linked
that all but guarantees payment up to $10,000 for unpaid licensed home improvement contractor claims.

I have documentation from the City and State regarding engineering licensing misrepresentation. His builders and company permits are valid, although he demonstrated an inability to understand a basic building code table. This guy has been in business since the 60's and should have his head between his legs, but he keeps on going. I feel a victim of a scam.

I'm confident of a win after going through arbitration. I just don't know what this guys game is, or if I'm giving up anything by accepting his check as written.

Gonna cash it and work it out later.

Mediation can be long and drawn out, but he has construction deposits and full design fees; it totals a lot so we now have no choice.




Leave aside the memo line - I wrote checks (each for close to $1k) to 2 different parties and switched the envelopes by mistake. One of them caught it and returned the check to me, but the other one was able to deposit it all the same. I am not sure the banks look at anything other than the dollar amount!

This isn't about what the banks will accept, it's about the legal implications of what's written on the check.

who's to say the check writer didn't write the memo AFTER it was cashed ?

Not to be confused with a "memo" on the back of the check where the payee would have to sign below.





RegUSPatOff

all rights reversed <img src="i/expressions/face-icon-small-tongue.gif" border=0>
prosecutors will be violated <img src="i/expressions/face-icon-small-tongue.gif" border=0>

RegUSPatOff said: who's to say the check writer didn't write the memo AFTER it was cashed ?

Not to be confused with a "memo" on the back of the check above where the payee would have to sign.

If your dispute came down to that, simply ask the bank where the check was deposited and/or the bank where it was drawn for a copy of the check.

afeld -- In addition to being one sick perv, you are also likely in violation of the Endangered Species Act.. Your friend, tuphat.

I have seen it mean nothing, according to Judge in Court.

If you have an oral contract (for goods, say), writing "For purchase of X" on the memo line will fulfill the statute of frauds and make the contract binding, even if the amount is in excess of a generally enforceable oral contract. I believe.

Dolmar above has a pretty good "lay person" summary. If there was a genuine dispute.


It's too late now, but couldn't the OP simply have crossed out whatever was on the memo line before depositing the check?
If he did that wouldn't that show that there was no "meeting of the minds" and therefore that the OP did not agree that he was accepting the amount as payment in full?

A while back I was tasked with closing out all the accounts and business of a company whose assets had been sold.

I sent out every payment with a disclaimer on the check that this constituted payment in full. It never had to suffer a legal challenge, but I didn't have any problems/claims from it. In a few cases I discussed it with vendors, but otherwise there were no issues.

Now I am not attributing this solely or even partly to the disclaimer. Lots of factors come into a play when trying to collect on a company that essentially no longer exists. So that is enough for most vendors to take what they can get.

However, if push came to shove, it would have potentially helped our position remitting a final payment in full and having it clearly noted on the check.






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